Howard Schultz on Health Care

Expand coverage to include part-time employees

We expanded our health-care coverage to include part-timers who worked as little as 20 hours a week. In the late 1980s, employer generosity was hopelessly out of fashion. Corporate raiders and soaring health-care costs had forced many American executives
to reduce benefits.

At the same time, health-care bills were soaring to unmanageable heights. Few companies covered part-time workers at all, and those who did restricted benefits to those working at least 30 hours a week. Most executives were actively
looking for ways to contain their medical insurance expenses.

Starbucks went the other direction: Instead of cutting health-care benefits, we found a way to increase ours. I saw my plan not as a generous optional benefit but as a core strategy.
Treat people like family, and they will be loyal and give their all.

We began offering full health benefits to all part-timers in late 1988. To my knowledge, we became the only private company--and later the only public company--to do so.

Offer employee coverage for terminal illnesses

The true value of our health-care program struck me most deeply in 1991, when we lost one of our earliest & most devoted partners, Jim Kerrigan, to AIDS. Jim started as a barista in 1986 and rose to the position of store manager.

Then one day, Jim came
into my office and told me he had AIDS. It took incredible courage. I had known he was gay but had no idea he was sick. His disease had entered a new phase, he explained, and he wouldn't be able to work any longer.

Starbucks had no provision for
employees with AIDS. We had to make a policy decision. Because of Jim, we decided to offer health-care coverage to all employees who have terminal illness, paying medical costs in full from the time they are not able to work until they are covered by
government programs, usually 29 months.

After his visit to me, I spoke with Jim often and visited him at the hospice. Within a year, he was gone. I received a letter from his family afterward, telling me how much they appreciated our benefit plan.